At Banjo, we want our clients to grow, prosper and achieve their goals. From time to time, we all face challenges and we need to do our best to protect our livelihoods. Recent unforeseen events – floods, bushfires and now COVID-19 – have triggered us to prepare the following to help you:
1. Understand your cash position
Make sure you have a clear cash flow projection for the next 6 months with scenarios that include a material reduction of revenue.
2. Make sure you have maximum cash and credit in your business
Review your planned expenditure and make sure you are focusing on minimizing any short term discretionary spending. Also, ensure your banking arrangements are maximized.
3. Collect debtors and don’t extend credit to known problem clients
Remember that if your clients don’t pay you in a time of economic stress they can destroy your business. Take cash up front from past offenders.
4. Insurance coverage
Many businesses have business interruption insurance and now is the time to contact your agent to review your policy.
5. Prepare your team
Review your team and stack rank them from best to the worst performer. Ask your team to double down on effort and ensure you have a plan to match your team to your revenues.
Review your contracts and get advice to understand whether you can work with your teams to arrange flexible terms to keep the whole team intact during a prolonged severe downturn.
6. Seek Government assistance
The ATO has implemented a series of administrative measures to assist Australians in experiencing financial difficulty as a result of the COVID-19 outbreak. For further information, click here.
7. Set the vision
Show a positive future to your team on the other side of any downturn. Share that things will get better over time if everyone works together.
Stress and dislocation in the economy provide the opportunity to accelerate.